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Springer Anderson Gymnastics prepared its annual financial statements dated December 31, 2012. The company used the FIFO inventory costing method, but it failed to apply the LC&NRV to the ending inventory. The preliminary 2012 income statement follows: Assume that you have been asked to restate the 2012 financial statements to incorporate the LC&NRV. You have developed the following data relating to the 2012 ending inventory: Restate the income statement to reflect the LC&NRV rule of the 2012 ending inventory. (Round your answers to 2 decimal places. Omit the "$" sign in your response.) Apply the lower of cost and net realizable value on an item-by-item basis and show computations. (Omit the "$" sign in your response.) Compare and explain the lower of cost and net realizable value effect on each amount that was changed in requirement 1. What is the conceptual basis for applying the lower of cost and net realizable value to merchandise inventories